NCUA Releases MBL Waiver Guidance

February 23, 2013

ALEXANDRIA, Va. (2/25/13)--The National Credit Union Administration has clarified the what, when and how of member business loan (MBL) waivers in a new letter to credit unions (13-CU-02), an attached supervisory letter, and supervisory guidance.

The guidance will help credit unions understand the MBL waiver process, and aid them as they work to maintain safe and sound MBL portfolios, NCUA Chairman Debbie Matz said.

This is the first time the agency has released these types of MBL waiver documents. Matz noted that the release of the documents was prompted in part by discussions at agency listening sessions held throughout the country.

The agency guidance details what must be included in a waiver application and how the agency reviews that application.

The guidance also addresses:

What types of MBL waivers are available;

When and how credit unions can obtain MBL "blanket" waivers;

When waivers are not needed for actions related to maintaining existing loans;

Which of the borrower's principals are required to provide a personal guarantee and the type of guarantee required based on different business ownership structures;

What constitutes an associated borrower;

Waiver documentation requirements; and

New NCUA procedures meant to streamline the process for obtaining waiver for credit unions buying a participation interest in an MBL.

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